China’s largest mainland equity funds quietly join spot Bitcoin ETF market, report says

Mainland Chinese fund companies are leveraging their Hong Kong subsidiaries to explore spot Bitcoin ETFs, signaling their keen interest in the new investment avenue.

Chinese mainland-based equity funds have reportedly submitted their applications to launch spot Bitcoin exchange-traded funds (ETFs) via their Hong Kong subsidiaries, according to a report from China’s state-owned newspaper Securities Times, which cites multiple institutions as a source.

While the full list of China’s companies interested in offering spot Bitcoin ETFs wasn’t disclosed, it has been confirmed that Harvest Fund Management’s Hong Kong branch is among those awaiting approval from the Securities & Futures Commission (SFC) of Hong Kong since January. The report says other Chinese public equity funds are said to be exploring the feasibility and potential outlook of spot Bitcoin ETF products.

The Hong Kong division of China Asset Management, one of the largest asset management companies in China, has reportedly also signed a cooperation agreement with Hong Kong’s licensed crypto exchange HashKey to “collectively promote and advance initiatives related to Web 3.0 in the asset management industry in Hong Kong.” Although a definitive timeline for spot Bitcoin ETFs in Asia has yet to be announced, industry insiders suggest that relevant applications could materialize as early as this quarter.

The momentum towards spot crypto ETFs gained traction when, in late 2023, the SFC and the Hong Kong Monetary Authority issued a joint circular acknowledging the increasing interest in launching spot crypto ETFs. While the SFC has granted permission for licensed crypto providers to offer crypto futures ETFs in the region, regulatory approval for spot ETFs is still pending.